Toronto's role as a four newspaper town

Six months ago, newspaper publisher Conrad Black did something that hasn't been attempted in North America since 1982, when Gannett started USA Today: He launched a new national daily, the National Post.

"We thought there was a need for a quality national newspaper to provide a lively and informative view of Canadian issues, events, and people," says Kenneth Whyte, editor in chief.

The new paper was awaited with keen anticipation - and in some quarters, nervousness. "I don't think anyone in the newspaper industry slept the night before it came out," says Jim Travers, executive managing editor of the Toronto Star.

To the larger world, the real story may be the fact that with the Post, Toronto now has four general-interest English-language daily newspapers. "The most competitive newspaper market in North America" is the phrase on people's lips. Even New York City, with the Times, the Daily News, and the Post, is a four-paper town only if you count The Wall Street Journal, which is full of interesting material without quite being a "general-interest" paper. Yet New York has a much larger population than Toronto's 4 million-plus.

Mexico City, with 22 million inhabitants, supports well over a dozen general-interest dailies, many with a strong presence, despite modest circulations in the tens of thousands. But Mexico has a tradition of numerous, more frankly partisan independent newspapers.

The National Post is clearly off to a strong start: 282,000 paid circulation as of April 20, along with 60,000-plus introductory giveaway copies. "I would have been delighted with 200,000 the first year," says Kenneth Whyte, editor in chief of the new paper. The Post's business plan calls for it to reach break-even by the fall of 2001 - much less time than USA Today allowed. Moreover, Mr. Whyte says, "People took us seriously from the beginning."

It's a stylishly designed broadsheet, with a "retro-design" that "almost looks modern," as one critic noted. Its publisher's conservative political agenda comes through clearly.

In Toronto, the inside-baseball talk has been about the Post as a challenge to the venerable Globe and Mail, which bills itself as "Canada's National Newspaper," and the Star, the metro broadsheet that is Canada's largest paper. (The tabloid Toronto Sun is widely deemed safe from the Post.)

The broader question is, Can a new paper expand the newspaper market over the long haul - or will it just reslice the pie? It's too early to be sure, but given the strength of Torontonians' appetite for papers, if it can be done anywhere, it can be done here.

"The Post has come along and made things more interesting for at least two of the other papers," says Bryan Cantley, vice president of the Canadian Newspaper Association (CNA). Acknowledging that there's been a lot of "gloom and doom" about the future of newspapers, he says, "Maybe the market has expanded to accommodate the Post." A moment of truth is coming, he says, when the Post will have to get "a real price" from subscribers now getting the paper at a discount. But the paper's success so far "seems to suggest that there's room for more products to read."

How does Toronto do it?

"It has a lot to do with the dominance of Toronto as a Canadian city," says Jeff Vidler, vice president for media research at the Angus Reid Group here. "It would be like New York City being 40 million people. Advertisers have to buy Toronto," he says.

Other observers point to Canadian literacy rates, and therefore newspaper readership rates, being higher than in the US. (Gradual long-term decline is an issue here, too, however.) And Toronto is full of immigrants who have brought newspaper-intensive reading habits with them from places like India, Pakistan, and Southeast Asia, says Mr. Travers of the Star.

Still others aren't so sure four papers are any big deal. "People have gotten hysterical about this," says Lorrie Goldstein, editor of the Toronto Sun. Publisher Black acquired the Financial Post, already a fourth daily in Toronto, and "bulked it up" into the National Post, as Mr. Goldstein puts it.

Post editor Kenneth Whyte seems uncomfortable designating his as a "Toronto paper." "We're a national newspaper. Two-thirds of our circulation is outside Toronto. We're based here, but we're not dependent on the Toronto market."

Philip Crawley, president and chief executive of the Globe and Mail, says up front that he was brought in from Britain to help his paper navigate through stronger competition. He describes the National Post in terms dismissive enough to suggest he must be seriously concerned. "It shows up on one's doorstep unsolicited, unasked-for..." he says, alluding to the new paper's free-trial distribution.

Some potential subscribers have been more receptive. "It shows up on your doorstep, and you take it into the house and sit down with it, and then - poof! - suddenly there's an hour gone by," as one Toronto woman put it.

Mr. Crawley concedes that the Post has "demonstrated that they can ramp up circulation - but persuading the advertiser to part with dollars is something else."

Weak advertising is a problem for the Post right now. But the overall trends in newspaper advertising would seem to favor both national papers.

"Advertising revenue is up," says Charles Dunbar, research director at CNA, by 3.3 percent for 1998 over the year before. "We are competing well against television - but they aren't weak yet." Moreover, he says, national advertising is the area where the growth is - albeit from a smaller base. And quality papers are good places to advertise high-end nationally distributed products like computers and cell phones. "Both editorially and commercially, newspapers have spent a lot of time being cowed by TV," says Whyte.

The Globe and Mail underwent a major redesign in July, including the introduction of color. Both it and the Post were designated by the Society of News Design as among the 17 "World's Best-Designed Newspapers."

The story of the Post launch and the public response to it reveals the fault lines between those who see newspapers as vehicles for telling stories and those who see them as vehicles for making money.

Crawley says, "It's possible that the market will expand. Whether it will expand enough for all players to make the profits they've been used to is another question."

"Every Toronto paper is a good paper in its own way," says Mr. Goldstein of the Sun. "To me the ultimate thing about the Post is that it's increased interest in newspapers."